Danske ups its full-year forecast but prepares Belfast bank for sale

Danske Bank said yesterday that it had raised its full-year forecast after high customer activity and improving macroeconomic conditions helped to drive an increase in first-half profits.

Denmark’s largest lender reported in its half-yearly statement that net profit had jumped to 9.4bn Danish crowns (£879m), up 36 per cent from the same period in 2014.

The bank said it now expects a net profit of above 16bn crowns for 2015, an increase of 2bn crowns from its previous estimate.

“In the first half of 2015, we benefited from our diversified business model and posted a satisfactory result despite the adverse effect of negative interest rates. The result is driven by high customer activity, improved macroeconomic conditions and lower impairments,” said chief executive Thomas Borgen.

Danske has had to cut costs to cope with slow growth rates in its main market, Denmark, after a property bubble burst and has sought market share in countries such as Norway and Sweden.

The group also said that as of 1 January 2016, its Northern Ireland unit would be treated as a standalone business and no longer include it in its personal and business banking.

“We have made a business review that concluded that synergies between the Northern Irish market and the Nordic markets are limited,” the bank said, with analysts saying it could be put on the block. “They are making the bank in Northern Ireland ready to be sold, it makes good sense,” analyst Christian Hede from Nordea Markets said.

Also, for the first time since 2007, the bank recorded a negative loan impairment charge of some 219m crowns against impairment of 626m crowns a year earlier.

Borgen added: “The second quarter is a good continuation of the last couple of quarters.

“We can see high customer activity and we have seen continued improved macroeconomic conditions and therefore also lower loan impairments.”

Danske’s shares are up 45 per cent since Borgen took office in September 2013. The pan-European banking index has risen 20 per cent.